Key Takeaways
- Bitcoin fell 5% to $62,236 as a signed U.S.-Iran peace accord erased initial cryptocurrency market gains.
- The digital currency slide dragged the broader crypto market cap down by 4.3% to $2.24 trillion.
- Easing Strait of Hormuz tensions point to ongoing downward price pressure for crude oil and gas.
Bitcoin Erases Gains Following U.S.-Iran Peace Accord
On Thursday, bitcoin tumbled to $62,000, wiping out gains made initially on rumors of peace between Iran and the U.S., and later after the formal announcement of an accord. Market data show that bitcoin, which attempted to test the $66,000 threshold shortly after midday Wednesday, initially plunged to just above $64,000. It remained above that level until an hour before midnight, when selling pressure sent it down to $63,643.
Although bitcoin briefly reclaimed $64,500, the rebound quickly stalled. The cryptocurrency slipped back below $64,000, recovered to $64,340, and then abruptly shed $2,000 in two hours to hit an intraday low of $62,236. Bitcoin later stabilized just above $62,400, marking a 5% daily loss. The drop represents a 7.5% decline since the cryptocurrency peaked above $67,300 on June 15.
Bitcoinโs decline also dragged its market capitalization down to $1.25 trillion, which in turn caused the broader crypto economyโs capitalization to plunge 4.3% to $2.24 trillion.
The reversal stands in stark contrast to global equity indices, some of which soared after the U.S. and Iranian presidents signed a memorandum of understanding. In Japan, the Nikkei closed with a 1.65% gain, while South Koreaโs Kospi reached a milestone by topping the 9,000-point threshold. The story was the same on Wall Street at the time of writing: the Nasdaq was up 1.71%, the S&P 500 rose 1.22% and the Dow Jones Industrial Average grew 0.5%.
In energy markets, the signing of the MOU caused oil prices to drop further. West Texas Intermediate briefly dipped below $74 per barrel and Brent crude fell below $77 per barrel. Reports of oil tankers transiting the Strait of Hormuzโapparently moving through the U.S. blockadeโsuggested both nations are abiding by the terms of the agreement, signaling further downward pressure on oil and gas prices.
Meanwhile, bitcoinโs downward slide wiped out approximately $177 million in long positions over a 24-hour period, compared to $19 million in short bets. Overall, the cryptocurrency marketโs slide triggered the liquidation of $601 million in long bets and $85.6 million in shorts.
